City, landlord in standoff over Midtown Mall

Thursday

Oct 31, 2013 at 5:00 AM

Above: Nana Benyiwa folds fabric at Original Grandmum African and Indian Fabrics one of the many businesses located in the Midtown Mall. Steven King/Worcester Magazine

As far as anyone knows, the city has no formal plans as to what it would if it owned the Midtown Mall . At its side and to its rear, there are more modern, larger and spiffier looking buildings – filled with empty spaces. It has about 21 active, first-floor retail spaces with stores run largely by immigrants and minorities. Still, its owner has been called a “slumlord” and an “embarrassment” - by a city councilor who admits he maybe has walked through the mall five times tops in the past several years. In fact, none of the councilors who were asked say they have done much more inside the mall than use it as a shortcut from Mechanic Street to Front Street, and vice-versa.

Where most of the other buildings along Front Street reach toward the sky, the mall is a short, flat-roofed former Woolworth's whose only major exterior “improvement” in the past 30-plus years has been the removal of the raised letters on its facade. Inside, new carpets and updated or replaced flooring are begged for. It is seen by some as an impediment to the ongoing development of CitySquare.

There are more pressing problems, city officials say. A report of police activity in and around the Midtown Mall this year and last shows, through Sept. 25, a total of 136 police-related incidents and 10 arrests. Add to that the city's focus on revitalizing downtown and catering to a growing student population, middle class families and businesses, and property owner Dean Marcus' properties on Front Street (in addition to the Midtown Mall at 22-30 Front St., he owns 10-20 Front St., which houses shops such as The Newsroom) don't exactly appear to fit the mold.

At-Large Councilor Rick Rushton, whose angry condemnation of Marcus more than a week ago followed the release of the criminal activity report provided by Chief Gary Gemme, is not backing off his words. At the same time, he also is not saying exactly what he – or other officials – actually want to do with the building.

“[The merchants] are providing services, but the condition of the building itself lends itself to … it has [had incidents of] drug dealing, selling stolen goods and violence,” Rushton says.

However, a closer inspection of Gemme's report shows that of the 49 police responses this year, the overwhelming majority of them were either disorderly conduct, general assistance requests or alarms. There was one assault and a domestic dispute. Four arrests so far have been on warrants. The rest of the responses, according to Gemme, “were miscellaneous and did not involve violence or a disturbance.” Of the 87 police-related incidents in 2012, the report lists just four physical assaults and two assault-related arrests. Roughly 38 percent of the incidents involved requests for general assistance.

Chuck Jackson, who says he retired from the Worcester Police Department after 26 years, helps out at Worcester Network Technology Academy Inc., an IT training center upstairs in the Midtown Mall, something he says he has done since February. In that time, says Jackson, he does not recall seeing police in or outside the mall more than one or two times.

“There is a big difference between responses and arrests,” he says. “I can tell you right now if you have councilors come and walk through [the mall], they're not going to see police officers.

As for what, specifically, Rushton wants from Marcus, the councilor says, “I want him to either make improvements or [sell the building].”

When asked whether he would seriously consider selling the mall, which he has run for about 33 years, the 70-year-old Marcus says, “What would I do?”

That is one of the frustrating things about Marcus – he answers many of a reporter's questions with his own questions. For example, asked whether he thinks his building could use some physical upgrades, he asks, “What do you think?” He bristles at suggestions that he oversees a slum. A complete tour of the Midtown Mall (there are three floors on the Mechanic Street side, two levels on Front Street) reveals areas where original wood and other fixtures are in place. There is available office space in the upper floors as well as the IT center.

One of the criticisms of Marcus has been that he has not made any significant, visible investments into the property. When asked how much he has invested in the mall, he says, “Over 33 years. I invested my life in it. I'm here seven days a week.”

Still, he does not budge when it is repeatedly suggested that the facade could use a facelift, saying he did restore it – many years ago when he removed the old front to reveal the brick surface behind it. Declining to give a figure, Marcus says he has made investments in his building over the years - “You don't keep a building like this running without making investments,” he says.

HVAC improvements are among those he cited.

City Manager Mike O'Brien says the issues with Marcus go back many years. It isn't that the building suddenly fell out of disrepair, he says – it is part of a pattern of neglect. O'Brien talks about a time several years back when Marcus put up chicken wire to protect pedestrians from fallen debris. And while Marcus says he once brought the facade to its natural brick, the city manager notes that he once had a false facade made of a material like particle board.

O'Brien says it is not about what larger plans the city has for the old mall.

“I know there's a desire to say, 'What's the city's intentions and what's the ultimate goal?' If you ask citizens and business owners … we really want to to see downtown brought back to life,” O'Brien says. “Block by block, street by street, working with landlords we will ultimately create vitality and new activity in downtown.”

That is an area where Marcus appears to have a case. If it is activity the city wants, it would be hard pressed to say the mall is not doing its part. Foot traffic may be slow, but the first floor is filled with businesses that open up shop every day. The same cannot be said for 44 Front St., a modern-looking and much larger building that is virtually empty (Workforce Central occupies one of the spaces). Other buildings around the Midtown Mall are suffering the same fate – a lack of occupancy.

There is a good reason the Front Street building is empty, O'Brien points out – it is bank-owned. He also says folks should not be fooled by outward appearances. The city has had issues with some of the infrastructure.

Still, officials who paint the mall as some sort of health and safety hazard lack at least some of the evidence to back it up. As far as O'Brien is aware, there have been no recent health or other code violations – he leaves it up to his various departments to stay up on that. It does not mean the building is in great shape. Officials cite the wet basement that is tended to by a sump pump as one issue.

But tenants such as George Opoku, who has run Ahenfie Barbershop just inside the Front Street entrance to the mall for about a year and three months (Ahenfie is a presidential palace in Ghana), appear content with their surroundings.

“As you know,” he says when asked what kind of shape he thinks the building is in, “it's an old mall. It could be better, but other than that, my business is OK. This is the beginning of my business career. It has given me the opportunity to start,” he says. “It has been great.”

Marcus shrugs when asked whether he thinks the city is unfairly targeting him, and if so, why. Last year he sold properties on Main Street. They were ultimately converted to micro-lofts to house young professionals as well as students at MCPHS University.

Some city officials have said Marcus had to be pushed into finalizing the sale. City Hall sources say that deal was supposed to include the Midtown Mall, but Marcus pulled out at the last minute. Marcus says that was not the case.

There is another rub when it comes to the building. While Rushton and others describe it as akin to a dump, it has an assessed value of $3.3 million. Marcus pays aroudn $100,000 a year in taxes. The property at 10-20 Front Street is assessed at $2.9 million. The seemingly high assessments are the result of the tax system used by the city – the so-called income method. The Income Capitalization Approach is based on anticipated benefits – what the investor can expect to earn in rent and when the property is sold. In short, the “income value” is determined by taking the net income, in the case of the Midtown Mall $441,547, and dividing it by the capitalization rate (cap rate), which for this building is 13.25 percent. That yields the $3.3-million assessment.

District 3 Councilor George Russell has questioned the income approach, and in the case of the Midtown Mall, when Rushton referred to it as a dump he asked why it is assessed so high.

“This is not something that is random,” O'Brien says of the city's seeming fixation with the mall. “It's not vindictive. It's a landlord [who] believes that reinvesting in the building is unnecessary. We would welcome the opportunity to work collaboratively with Dean Marcus.”

The city manager says he believes there could be a place in CitySquare for the Midtown Mall. “Certainly, a well-maintained building that has at least gone through the efforts to stay current,” O'Brien says. “We want a level of collaboration and support with the Midtown Mall.”

Have a story tip or idea? Call Walter Bird Jr. at 508-749-3166, ext. 322, or email him at wbird@worcestermagazine.com. Be sure to follow him on Twitter @walterbirdjr and catch him with Paul Westcott every Thursday morning at 8:35 on radio station WTAG 580AM for all things Worcester!